Representative Haydon said Mr. Bill Hintze, Deputy
Budget Director, Governor’s Office for Policy and Management, requested that a
correction be made to the February 18, 2004 minutes. He asked Ms. Mary Lynn
Collins, Committee Staff Administrator, to explain the correction. Ms. Collins
said the correction involves the Committee’s discussion on February 18
regarding the proposal by the Department of Corrections to use federal funds to
build an 80-bed medical unit rather than a dorm as originally planned. During
that discussion, questions were raised as to how health care is provided to the
prison population. The relevant section of the minutes read as follows: “Mr.
Hintze said last fall the Justice Cabinet changed the process for the delivery
of medical care throughout the Department of Corrections. They cancelled a
contract arrangement and partnership with the University of Kentucky in order
to procure health care through a network of providers.” Mr. Hintze has
indicated that they had not cancelled a contract with UK, but had procured a
contract with UK. It was suggested that the minutes be amended to read: “Mr.
Hintze said last fall the Department of Corrections cancelled a number of
existing medical service contracts so they could contract for a single unified
medical service contract with the University of Kentucky.”

Senator Moore made a motion to approve the correction
to the minutes of the February 18, 2004 meeting as submitted. The motion was
seconded by Senator Rhoads and passed by voice vote.

Senator Moore then made a motion to approve the
minutes of the March 17, 2004 meeting as submitted. The motion was seconded by
Representative Marcotte and passed by voice vote.

Representative Haydon called on Ms. Collins to review
correspondence and information items. Ms. Collins said members’ folders
included five items of correspondence – correspondence from Sandra Woodley,
Council on Postsecondary Education, reporting on reallocation of bond
authorization from the 2002-2004 CPE Agency Bond Pools; quarterly status
reports on authorized capital projects from the Finance and Administration
Cabinet, Murray State University, University of Kentucky, University of
Louisville, and Western Kentucky University; quarterly status report on court
facility construction and renovation projects from the Administrative Office of
the Courts; the semi-annual report of the Kentucky Asset/Liability Commission;
and the Kentucky Lottery Corporation’s monthly financial report for February
2004.

Also included in members’ folders were three
information items: a status report from the Council on Postsecondary Education
on Student Housing Fire Safety; proposed legislation relating to the
jurisdiction of the Capital Projects and Bond Oversight Committee; and a staff
update on various capital projects. Ms. Collins noted an article in the staff
update reported that there has been an escalation in the cost of construction
materials, particularly steel. She said the Committee members may want to pay
close attention to this, as it could affect currently authorized projects.

The next agenda item was the bond activity report from
the Office of Financial Management. Representative Haydon asked Ms. Sandy
Williams, Kentucky Infrastructure Authority (KIA), to report two new Fund A
loan requests. Ms. Williams reported a Fund A1 planning and design loan request
in the amount of $298,200 for the Jessamine-South Elkhorn Water District. The
proceeds will be used to design a sanitary sewer collection system to connect
residences in Jessamine County to the West Hickman Treatment Plant.

Senator Buford made a motion to approve the Fund A1
loan. The motion was seconded by Senator Moore and passed by unanimous roll
call vote.

Ms. Williams next reported a Fund A loan request in
the amount of $5,000,000 for the City of Berea. The proceeds will be used to
expand the capacity of an existing regional sewer treatment plant.

Senator Rhoads made a motion to approve the Fund A
loan. The motion was seconded and passed by unanimous roll call vote.

Representative Haydon said included in members’
folders were two reports from KIA regarding various new Tobacco and Coal
Development Grants. The General Assembly authorized each of the coal and
tobacco projects identified, and no further action was required.

The next report was provided by George Burgess,
Executive Director for the Office of Financial Management (OFM), and Tom
Howard, Deputy Executive Director, OFM. Mr. Howard provided a follow-up report
for University of Kentucky (UK) Consolidated Educational Buildings Refunding
Revenue Bonds, Series P, Q, and R (Second Series), dated March 31, 2004. Mr.
Howard said this bond issue provided present value savings of 1.65% (or
approximately $821,000) and approximately $1.4 million in negative arbitrage
which the University should be able to recoup under current market conditions.
Mr. Howard said that would result in present value savings over 4%.

Representative Haydon then asked Mr. Burgess to
present the new school bond issues. Mr. Burgess said there were 15 school bond
issues with School Facilities Construction Commission (SFCC) debt service
participation: Ballard County, Corbin Independent (Whitley County) (2), Hardin
County (2), Hickman County, Johnson County, Laurel County, Livingston County,
Marion County, Oldham County, Paris Independent (Bourbon County), Pikeville
Independent (Pike County), Providence Independent (Webster County), and
Walton-Verona Independent (Boone County).

Senator Leeper made a motion to approve the 15 school
bond issues. The motion was seconded by Senator Buford and passed by unanimous
roll call vote.

Representative Haydon said there were two
locally–funded school bond issues submitted to the Committee for review this
month: Bracken County and Cumberland County. He said all disclosure information
has been filed, and no further action on the bond issues is required.

Representative Haydon then asked Mr. Bill Hintze to
present the monthly Finance and Administration Cabinet project report. Mr.
Hintze reported that the recently-approved federal budget includes $1,200,000
in federal funds to complete the Northern Kentucky University (NKU) planetarium
space in the NKU Natural Science Building. These funds will be substituted for
the private funds reported as part of the March 2003 scope increase approved by
the Committee. The $500,000 in available private funds will be used to create
an endowment for expenses associated with operating the planetarium and to fund
equipment upgrades. There is no change in the project’s authorized scope of
$39,200,000. Representative Haydon said no further action is required.

Mr. Ken Clevidence, Associate Vice President for
Fiscal Affairs, University of Kentucky, reported that the University plans to
combine two parking structure projects, authorized in the 2002-04 budget, for a
total scope of $23,630,000 ($20,280,000 agency bond funds and $3,350,000 restricted
funds). They anticipate building two structures: a 756-space garage on
Virginia and Press Avenue to serve the medical center/research campus and a
583-space facility next to the new housing complex to be located on the south
campus, near the existing Kirwan-Blanding Complex. Mr. Clevidence said the debt
service will be paid from parking income. Representative Haydon said no further
action is required.

The Committee’s next meeting is scheduled for May 18
at 1:00 p.m.

With there being no further business, Senator Leeper
made a motion to adjourn the meeting. The motion was seconded and passed by
voice vote. The meeting adjourned at 8:45 a.m.